UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release No. 7449 / September 10, 1997
SECURITIES EXCHANGE ACT 1934
Release No. 39042 / September 10, 1997
ADMINISTRATIVE PROCEEDING
File No. 3-9399
________________________________________
|
IN THE MATTER OF |ORDER INSTITUTING
|PUBLIC PROCEEDINGS,
JUERGENS OTTO WINKLER |MAKING FINDINGS AND
RESPONDENT. |IMPOSING REMEDIAL
|SANCTIONS
________________________________________ |
I.
The Securities and Exchange Commission (Commission) deems it appropriate
and in the public interest that public administrative proceedings be
instituted pursuant to Sections 15(b), 19(h) and 21C of the Securities and
Exchange Act of 1934 (Exchange Act) and Section 8A of the Securities Act of
1933 (Securities Act) against Juergens Otto Winkler (Winkler).
In anticipation of the institution of these administrative proceedings,
Winkler has submitted an Offer of Settlement (Offer) which the Commission
has determined to accept. Solely for the purpose of these proceedings and
any other proceedings brought by or on behalf of the Commission or in which
the Commission is a party, and without admitting or denying the findings,
except as to jurisdiction and the facts set forth in Paragraph II.A. below,
which he admits, Winkler consents to the entry of this Order, its findings
and the imposition of sanctions as set forth below.
ACCORDINGLY, IT IS ORDERED THAT proceedings pursuant to Sections 15(b),
19(h) and 21C of the Exchange Act and 8A of the Securities Act be, and they
hereby are, instituted.
II.
On the basis of this Order and the Offer submitted by Winkler, the
Commission finds that:
The findings herein are made pursuant to Winkler's
Offer and are not binding on any other person or entity named as
a respondent in this or any other proceeding.
.
A.From January 1973 to June 1992, Winkler, age 56, was a registered
representative with broker-dealers registered with the Commission pursuant
to Section 15(b) of the Exchange Act.
B.On or about November 15, 1990 Winkler was a registered representative
with a broker-dealer. At that time he wrote a letter on the broker-
dealer's letterhead attesting to the finances of an individual and a
company which were involved in a fraudulent "Prime Bank" scheme, the "Konex
Roll Program," which raised at least $12.5 million from the Chicago Housing
Authority (CHA) through the offer and sale of investment contracts. In
fact, the Konex Roll Program was nothing more than a scheme to defraud
investors and misappropriate funds. In the letter Winkler stated that the
company carried brokerage account balances in excess of two million
dollars. Winkler has admitted that this representation was false.
C.On or about May 22, 1992, Winkler was a registered representative of
another broker-dealer. At that time Winkler signed a second letter
attesting to the finances of the same individual and company. This letter
was addressed to the vice-president of a bank. The letter stated that
Winkler had personally handled transactions on behalf of the individual and
the company "ranging to the high nine figures." Winkler has admitted that
this representation was false.
D.Winkler did not actually write the second letter. Instead, he supplied
the letterhead of the broker-dealer to the individual involved in the
fraudulent scheme. This individual wrote the letter and later asked
Winkler to sign it. After reviewing the letter, Winkler signed the letter
knowing that it contained misrepresentations regarding the transactions of
the company and the individual.
E.By executing the letters described above, Winkler knowingly and
substantially assisted a Prime Bank scheme which defrauded investors by
creating the impression that the sellers of the Prime Bank Notes were
successful businessmen.
F.As a result of the activity described in paragraphs II.A. through E.
above, Winkler willfully aided and abetted and caused violations of Section
17(a) of the Securities Act in that Winkler, in the offer or sale of
securities, namely the Konex Roll Program, by the use of the means or
instruments of transportation or communication in interstate commerce or by
the use of the mails, directly or indirectly: employed devices, schemes or
artifices to defraud; obtained money or property by means of untrue
statements of material facts or an omission to state material facts
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading; or engaged in
transactions, practices or courses of business which operated as a fraud or
deceit upon purchasers or prospective purchasers of such securities.
G.As a result of the activity described in paragraphs II.A. through E.
above, Winkler willfully aided and abetted and caused violations of Section
10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that
Winkler, in connection with the purchase or sale of securities, namely, the
======END OF PAGE 2======
.
Konex Roll Program, by the use of the means or instrumentalities of
interstate commerce, or of the mails, directly or indirectly: employed
devices, schemes or artifices to defraud; made untrue statements of
material facts or omitted to state material facts necessary in order to
make the statements made, in the light of the circumstances under which
they were made, not misleading; or engaged in acts, practices or courses of
business which operated as a fraud or deceit upon any person.
III.
In view of the foregoing, it is in the public interest to impose sanctions
specified in the Offer of Settlement.
ACCORDINGLY, IT IS ORDERED:
1. Pursuant to Section 8A of the Securities Act and Section 21C of the
Exchange Act, that Winkler cease and desist from committing or causing any
violation and any future violation of Section 17(a) of the Securities Act,
Section 10(b) of the Exchange Act or Rule 10b-5 thereunder; and
2.That Winkler be, and hereby is, barred from association with any broker,
dealer, municipal securities dealer, investment company or investment
adviser.
By the Commission.
Jonathan G. Katz
Secretary
======END OF PAGE 3======